Investors Are Piling Back Into Junk Bond Funds

Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today looks at a return of capital back into junk bond funds, renewed interest in the energy sector, and continued interest in emerging market equities.

We continued to see some bids around right into the end of quarter in High Yield Corporate Bond ETFs, with both HYG (iShares HY Corporate Bond) and JNK (SPDR High Yield Bond) pulling in about $500 million apiece via inflows in the past couple sessions. Year-to-date, HYG has still seen net outflows to the tune of about $750 million, while JNK has seen about $700 leave the fund, although those trends seem to have reversed here.

Elsewhere, we mentioned upside April call buying in XLE (SPDR Energy) last week on a snapback rally in Crude Oil prices (and Energy stocks), and XLE itself has seen about $500 million enter the fund in recent sessions via creation flows as well.

Additionally, in quarter-end trading, EFA (iShares MSCI EAFE) and IEFA (iShares Core MSCI EAFE) finished the week with inflows.

The iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:HYG) was trading at $87.36 per share on Monday morning, down $0.04 (-0.05%). Year-to-date, HYG has gained 0.94%, versus a 4.95% rise in the benchmark S&P 500 index during the same period.

HYG currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 36 ETFs in the High Yield Bond ETFs category.


Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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